In early May the company said it was in close talks with four international hoteliers including Four Seasons Hotels and Resorts, Ritz-Carlton, St. Regis and Le Meridien, which enjoys a strategic alliance with Japan's Nikko Hotel.

The proposed five-star hotel would occupy approximately 300 rooms and be located on floors 67 through 84.

But in order to meet interior structural requirements for hotels, the building needed to make some modifications that would delay the project and increase its cost, Chen said.

The Taiwan Stock Exchange Corp (證交所), a major shareholder of TFCC and an important tenant of the yet-to-be completed building, has also expressed opposition to having a hotel in the building, saying that visitors to the hotel could cause security problems, Chen said.

The TFCC is now under more pressure to find tenants to fill up space.

Premium Taipei office rents fell 3.02 percent to NT$2,282 per ping in the second quarter of this year from the previous quarter, according to statistics from Colliers Jardine Ltd (怡高物業顧問), the local branch of Colliers Jardine International.

"The office market outlook is gloomy," said Vicky Hsu (許美珠), a Colliers researcher.

The price is likely to keep falling for the rest of the year, with an increase in supply of nearly 30,000 pings later this year, she said.

Oversupply is turning into a a major problem in the market, another analyst said.

"That situation just keeps pushing the rents down," said Wendy Hsueh (薛惠珍), director of research at DTZ Debenham Tie Leung.

"Compared with Taipei's average premium office rentals in 2000, we've seen a 20-percent drop to NT$2,150 per ping in the first quarter of this year," Hsueh said. "Rents have almost hit the bottom and we estimate it will stay at that level for a while."

Despite the general market gloom, TFCC is still confident and targeting international financial firms as prime tenants.

"We are considering setting rentals close to the Far Eastern Building (遠企大樓)" on Tunhwa South Road, Chen said.

Currently the monthly office rental of the Far Eastern Building is NT$3,200 per ping.

TFCC, which plans to officially announce its rental plan at a leasing convention late next month, is in talks with several foreign financial institutions such as Morgan Stanley, Merrill Lynch and Goldman Sachs, he said.

Construction of the 101-floor, 60,000-ping (198,000m2) office tower is slated to be completed in October next year.

"We hope to lease at least 30 percent of the office space by that time," Chen said.

TFCC is scheduled to hold a topping-out ceremony today to celebrate the final construction stage of the project.

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